Earnings Per Common Share

12 Months Ended

Dec. 31, 2020

Basic income (loss) per common share (“EPS”) is computed based on the weighted average number of common shares outstanding. Diluted income (loss) per common share is computed based on the weighted average number of common shares outstanding plus the impact of forward equity sales agreements using the treasury stock method and common shares issuable from the assumed conversion of DownREIT units, stock options, certain performance restricted stock units, and unvested restricted stock units. Only those instruments having a dilutive impact on the Company’s basic income (loss) per share are included in diluted income (loss) per share during the periods presented.

Restricted stock and certain performance restricted stock units are considered participating securities, because dividend payments are not forfeited even if the underlying award does not vest, and require use of the two-class method when computing basic and diluted earnings per share.

Refer to Note 13 for a discussion of the sale of shares under and settlement of forward sales agreements during the periods presented. The Company considered the potential dilution resulting from the forward agreements to the calculation of earnings per share. At inception, the agreements do not have an effect on the computation of basic EPS as no shares are delivered until settlement. However, the Company uses the treasury stock method to calculate the dilution, if any, resulting from the forward sales agreements during the period of time prior to settlement. The aggregate effect on the Company’s diluted weighted-average common shares for the year ended December 31, 2020 and 2019 was 0.2 million and 2.8 million weighted-average incremental shares, respectively, from the forward equity sales agreements.

The following table illustrates the computation of basic and diluted earnings per share (in thousands, except per share amounts):


	Year Ended December 31,
	2020		2019		2018
Numerator
Income from continuing operations	$	160,507	$	175,469	$	837,218
Noncontrolling interests' share in continuing operations	(14,394)		(14,558)		(12,294)
Income (loss) from continuing operations attributable to Healthpeak Properties, Inc.	146,113		160,911		824,924
Less: Participating securities' share in continuing operations	(2,416)		(1,543)		(2,669)
Income (loss) from continuing operations applicable to common shares	143,697		159,368		822,255
Income (loss) from discontinued operations	267,746		(115,408)		236,256
Noncontrolling interests' share in discontinued operations	(296)		27		(87)
Net income (loss) applicable to common shares	$	411,147	$	43,987	$	1,058,424
Numerator - Dilutive
Net income (loss) applicable to common shares	$	411,147	$	43,987	$	1,058,424
Add: distributions on dilutive convertible units and other	—		—		6,919
Dilutive net income (loss) available to common shares	$	411,147	$	43,987	$	1,065,343
Denominator
Basic weighted average shares outstanding	530,555		486,255		470,551
Dilutive potential common shares - equity awards(1)	300		309		168
Dilutive potential common shares - forward equity agreements(2)	201		2,771		—
Dilutive potential common shares - DownREIT conversions	—		—		4,668
Diluted weighted average common shares	531,056		489,335		475,387
Earnings (loss) per common share
Continuing operations	$	0.27	$	0.33	$	1.75
Discontinued operations	0.50		(0.24)		0.50
Net income (loss) applicable to common shares	$	0.77	$	0.09	$	2.25
Diluted earnings per common share:
Continuing operations	$	0.27	$	0.33	$	1.74
Discontinued operations	0.50		(0.24)		0.50
Net income (loss) applicable to common shares	$	0.77	$	0.09	$	2.24

(1)For all periods presented, represents the dilutive impact of 1 million outstanding equity awards (restricted stock units and stock options).

(2)For the year ended December 31, 2020, represents the dilutive impact of 32 million shares that were settled during the year then ended. For the year ended December 31, 2019, represents the dilutive impact of 21 million shares that were settled during the year then ended and 30 million shares of common stock under forward sales agreements that had not been settled as of December 31, 2019.

For the years ended December 31, 2020, 2019, and 2018, 7 million, 7 million, and 2 million shares, respectively, issuable upon conversion of DownREIT units were not included because they are anti-dilutive.